CHAPTER 13.02. Who Can Make a Guaranty

• Jurisdiction: United States

13.02. Who Can Make a Guaranty

Delaware entities are statutorily authorized to enter into contracts of guaranty, although a particular entity's organizational documents may limit this authorization.²⁵ For Delaware corporations, there is an additional requirement that the guaranty be "necessary or convenient to the conduct, promotion or attainment of [its] business."²⁶ Practically speaking, this does not provide a significant obstacle where the guarantor corporation is related to the primary obligor.

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Notes:

^[25] 8 Del. C. § 122(13); 6 Del. C. § 15-202(e); 6 Del. C. § 17-106(c); 6 Del. C. § 18-106(c); 6 Del. C. § 2705. See supra Section 1.08 for discussion of authority.

^[26] 8 Del. C. § 122(13).